Income breakdown

If you have been reading this blog you’ll know that I went freelance in September 2008 after fourteen and a half years with a staff job on a specialist newspaper. Like most self-employed people I’m now working on my end of year accounts and I thought that it would be interesting to compare the figures for the last seven months with the equivalent period fifteen years ago. I wanted to know if I was a) Turning over the same kind of figures b) How my turnover breaks down compared to 1993 and c) Am I earning the same sort of money? Amazingly I have kept my hand written ledgers and so, in no particularly logical order, here is what I have discovered:

Comparing turnover for 1992-1993 and 2008-2009

Comparing turnover for 1992-1993 and 2008-2009

For anyone who is interested in actual numbers – I apologise, I’m going to talk about percentages and relative figures rather than pounds, shillings and pennys. Being English, I’m shy about disclosing my actual earnings.

The easiest figure to compare is my gross turnover. This, for the non-accountants like me out there, is the total figure for which I have invoiced for. My gross turnover for 2008-2009 was only 74.4% of the figure for 1992-1993. Given that the average cost of living has gone up by nearly 60% over the same period, that doesn’t look like a healthy figure. I haven’t calculated my own cost of living increase but I would expect it to be a little less than the average figure. This graph shows the percentage of my total turnover broken down into categories as I have invoiced them. The red is for 1992-1993 and the blue is for 2008-2009.

The breakdown of turnover is far more revealing. In 1993 28% of my gross figure came from reproduction fees for pictures being used from my own library, re-use of images held on file by newspapers and magazines or sales by my agency on my behalf. In 2008-2009 that figure is down to under 5%. That is partly because I haven’t built up much stock but I believe it’s also due to the fact that so many publications are either paying nominal amounts for re-use or not paying reproduction fees at all.

More interestingly, my turnover consisted of far larger amounts of expenses charged to clients. Film, processing, printing and delivery (postage and couriers) accounted for about 38% of my gross figure, whilst travel expenses made up another 13%. That’s grand total of 79% of my 1993 turnover that wasn’t fees for photography. Turn that around and only 21% of my invoicing was for actually going out and taking pictures. So how does that compare to this year? This is a tricky one because several of my clients pay “all-in” fees which are not broken down into creative fees and expenses and so I have had to separate these myself. The best “guesstimate” that I can come up with is that my travel expenses are up to about 18%, film and processing no longer exist in the way that they did and printing has been replaced by burning CDs. A few clients pay extra for processing files, but most don’t.

The time spent digitally processing files has to be accounted for but it doesn’t really show up on my turnover figures. Another “guesstimate” would put the time spent in front of the computer at just under half of my creative time – shown on the graph above in the lighter blue.

So what about my actual expenditure? My costs these days are very different. Gone is the need to have a darkroom in central London. Gone is the need to send prints and transparencies around by courier. Gone is the huge expense of buying film and processing it. Gone is the cost of storing negatives and transparencies. The missing costs have been balanced by the expense of owning computers, mass digital storage, digital cameras and having to constantly update and upgrade the technology. Going through my expenditure, I calculate that it’s actually cheaper for me to be a photographer now – that’s quite a shocking conclusion but the cost of renting premises and using so many couriers was huge. I used to charge clients for the film and processing and make a few percent on doing so. Now, few of them pay extra for the processing of digital files. My average photography fee is between 70% and 100% higher but that is swallowed up by the time spent in front of the computer and the increase in the cost of living.

My conclusion? Swings and roundabouts come to mind here. Costs have changed, turnover is down and we are in the middle of a recession. Am I better off? No. Am I worse off? Probably not. There isn’t a definitive answer but I would say that, despite everything, nothing has changed – well, I’m fifteen years older and (I hope) a better photographer. I’m going to re-visit this topic in a few months and see if I can make more sense of it.

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